Buying superior lease worth anything?

[MegsEggs]

Hi, after many months trying to buy a Leasehold House (vendors didn't get consent for alterations, is Freehold Managers again...), they have been offered the Freehold... except that actually what their solicitors have agreed is the transfer of the Superior Lease.

Would this solve the consent issue? My solicitor seems unsure and I can't get my head round it. Thanks

[jeffrey]

Let's analyse.
1. FM owns freehold reversion.
2. Is FM's leaseholder:
a. your V; or
b. an intermediate party (X)?
3. If X owns a 'superior lease' (= leasehold reversion) and V owns an underlease, V's purchase from only X does not eliminate FM from the equation. It would leave the 'consent' issue unresolved. Better: if V has owned the underleasehold interest for at least two years and the property is a house (not a flat), V should serve Notice of Claim- under Leasehold Reform Act 1967- on FM and on X.

[MegsEggs]

They have 900+ yr lease, is a house, have lived there 20 years.

Have just spoken to my solicitor and get it a bit more now! Was getting superior and freehold confused (this is why we pay you lots of money... ;-)

1. FM/Finalbrief own Superior Lease
2. Shenstone Properties own Freehold
3. V have purchased/about to purchase Superior Lease but not Freehold.

We obv need to see the other lease and terms, but could solve the consent issue? Or are Shenstone as bad?
Thanks

[jeffrey]

So Shenstone owns f/r (and FM owns leasehold reversion, which V is buying).
Both companies are, er, well-known for being at least a little demanding. V/you really need to eliminate both. If V has owned underlease for > 2yrs. (residence is irrelevant, as it's ownership that counts), inssit on V serving Notice of Claim and at least assigning its benefit to you.

[MegsEggs]

How long would it take for Notice of Claim to be served and transferred?

Thanks

[jeffrey]

How long would it take for Notice of Claim to be served and transferred?
About 45mins. including typing/checking/enveloping/posting.

[Poppy]

If the freehold is purchased, then consent for alterations from the freeholder is no longer needed. If the property remains leasehold, the consent for alterations will have to be resolved. Your solicitor should check that all necessary planning permission/building control certification is obtained whether freehold or leasehold.

For the circumstances described, it is best if the existing lessee (the vendor) either:

informally negotiates to buy the freehold, if an agreement cannot be reached, then
issue a Notice of Claim under the Leasehold Reform Act 1967.

Surely you want the likes of Freehold Managers and Shenstone completely out of the picture before deciding whether to buy this particular property?

[Gordon999]

I agree with Poppy - get FM and Shenstone out of your life.

I recommend you to visit website www.rpts.gov.uk and check out decisions for LVT NORTHERN OFFICE == house enfranchisement and look at LVT Decision FOR MACCLESFIELD 2009. ( For 999 Year Leasehold house )

[MegsEggs]

All very interesting and helpful, thanks. House is in London but good to know valuations- great website.

The only reason we are continuing is because, frankly, this property is pretty unique for our miniscule budget. I have said that IF the new lease does not mention alterations (which is pretty unlikely) we will exchange but will ask them to buy freehold at agreed price or transfer notice. We refuse to be in breach of lease with a company such as this, but are (reasonably) happy to fight/go to tribunal for anything unfair - and we wanted to buy freehold eventually anyway (notice transfer sounds v sensible, didn't realise it could be done n dusted with one letter).

To be honest, I have no idea why the vendor's solicitor didn't advise them to buy freehold before this whole fiasco arose.

[jeffrey]

I still recommend service of Notice of Claim before V completes purchase of the leasehold reversion. Suppose that FM denies a later Notice's validity on the grounds that it was served by someone who (at the time) was the underlessee but now is no longer such?

[MegsEggs]

Presumably they will have the right to buy the freehold of the new lease though? I am not entirely convinced that it will solve the consent issue as surely the new lease will mention it too (waiting to see copy). In which case they really shouldn't buy it. Though they probably will anyway (vendor's lazy/incompetent/thick solicitors).

[Poppy]

Have you properly understood what the members have been suggesting to you? It is better for the existing lessee (the vendor) to obtain the freehold BEFORE you purchase the property. You need to encourage the vendor to issue a notice of claim or informally negotiate a price for the freehold. Get your solicitor to communicate this to the vendor's solicitor.

If that happens you will be buying a freehold property, not a leasehold. Therefore you will not need a consent for alterations.

[MegsEggs]

Yes, I understand.

But the reality is we are dealing with some very very reluctant solicitors who have already said they don't want to go into buying the freehold. And for some reason think that just buying the superior lease will solve the consent issue.

I think it's unlikely that the new lease will be radically different, so therefore we will be insisting on the freehold or getting the consent (before the sale). Obviously, we would much rather be moving in to a freehold house, but this has been going on for months, so if there is any way of exchanging without being in breach of lease (we did after all, offer on a leasehold house) then we will.

It has been a saga. Until three days ago, we were told that the vendors had been offered the freehold for £3,600 and we had agreed to pay £3,000 to them for it. The vendors have also paid £2,500 for retrospective consent that didn't cover everything and was insufficent. Should not have been so hard, but it is difficult getting the solicitors to do anything but the bare minimum - they have relied on (naive) vendors doing the work. As mentioned, if the property wasn't so great, we'd be walking (running) away!!

[jeffrey]

But the reality is we are dealing with some very very reluctant solicitors who have already said they don't want to go into buying the freehold.
Nonsense. It's for the client (not the solicitors) to decide what's required. If your solicitors are reluctant to do their job, sack them and appoint some who will do as instructed. If it's your vendor (not you) whose solicitors are 'reluctant', there's rather less that you can do other than threaten to withdraw entirely from the purchase.

[MegsEggs]

Yes, of course it's the vendors' solicitors (ours is great)! And why it's so frustrating. We have already had to get the client (vendors) to insist on something else they refused to do (maybe should have walked away then).

Waiting to see lease (today?????) and tbh if they have screwed this up too, then yes, not sure we can actually trust them to complete the work properly anyway.

[jeffrey]

What reason does V give for not serving Notice of Claim? If it's merely an unwillingness to accept responsibility for L's costs, explain that- in taking an Assignment of the Notice- you'll covenant to indemnify V against all such costs.

[MegsEggs]

UPDATE: the lease came back (eventually) and is a simple 2 page lease, and is fine. So we are going to exchange (hurrah!).
trying to decide about requesting Notice of Claim - does the initial letter request the Freeholder to set a price or do you have to offer a price? Also, how obliged are you to actually follow through with it (we don't really have any money to pay for it, though it could be found...)
Thanks very much for your help and comments!

[Gordon999]

What is the annual ground rent for the 900 year lease ?

[jeffrey]

UPDATE: the lease came back (eventually) and is a simple 2 page lease, and is fine. So we are going to exchange (hurrah!).
trying to decide about requesting Notice of Claim - does the initial letter request the Freeholder to set a price or do you have to offer a price? Also, how obliged are you to actually follow through with it (we don't really have any money to pay for it, though it could be found...)
Thanks very much for your help and comments!
All points seem to be covered by advice previously given.

[MegsEggs]

Annual ground rent is £3.50, I have seen the valuations of the houses on the site you linked to - and we are not expecting it to be too much. It's the spiralling legal fees we are a bit eek about. And don't really want to instruct a surveyor at a cost of £600 (we have just extended our own lease so been down this route already).

Jeffrey, I have read but can't see the answers to the two particular questions I asked (re obligation and whether the inital letter states a price). However, I take the hint and will go and nag my own solicitor/google for the answers.

Just want it all to be over tbh.

Thanks for the help again.

[jeffrey]

Annual ground rent is £3.50, I have seen the valuations of the houses on the site you linked to - and we are not expecting it to be too much. It's the spiralling legal fees we are a bit eek about. And don't really want to instruct a surveyor at a cost of £600 (we have just extended our own lease so been down this route already).

Jeffrey, I have read but can't see the answers to the two particular questions I asked (re obligation and whether the inital letter states a price). However, I take the hint and will go and nag my own solicitor/google for the answers.
This is a house. The Notice of Claim [1967 Act] does not propose a price, unlike the corresponding forms for flats.